M&I Announces Fourth Quarter Events
December 17 2007 - 7:31AM
PR Newswire (US)
M&I Retains Strong Capital Position MILWAUKEE, Dec. 17
/PRNewswire-FirstCall/ -- Marshall & Ilsley Corporation
(NYSE:MI) (M&I) today announced several unusual events which
will impact M&I's financial results for the quarter and year
ending December 31, 2007. On November 1, 2007, the separation of
Metavante Technologies, Inc. from M&I was completed resulting
in a gain to M&I of $526 million. This gain is tax-free to
M&I and will be reported as a component of discontinued
operations in the quarter ending December 31, 2007. There will also
be after-tax costs of approximately $21 million related to the
separation transaction in the same period. M&I received a
contribution of $1.665 billion in cash in the separation
transaction which strengthened M&I's capital position as
described below. On November 13, 2007, M&I announced that it
would record an after-tax liability of approximately $5 million in
connection with its share of the proposed settlement of the
American Express antitrust litigation against Visa. While M&I
is not a named defendant in this litigation, M&I and other Visa
member banks are obligated to share in certain losses in connection
with the litigation under Visa's by-laws. On November 16, 2007,
M&I completed the sale of its three branches in the Tulsa,
Oklahoma market resulting in an after-tax gain of approximately $17
million. M&I determined that exiting the Tulsa market was a
better allocation of resources as compared to the costs of further
expansion in that market. On December 17, 2007, M&I retired $1
billion of Puttable Reset Securities ("PURS") issued by its
subsidiary, M&I Marshall & Ilsley Bank. The PURS were
initially issued in November 2000, and were remarketed in December
of each year thereafter. Given the currently unfavorable credit
market environment, M&I determined to retire the PURS in order
to lower M&I's borrowing costs going forward. M&I incurred
a one-time, after-tax charge of $48 million in connection with the
retirement of this debt. M&I expects to recover this charge
through lower financing costs over the next approximately three
years. Finally, as was discussed in M&I's third quarter Form
10-Q, M&I continues to assess its loan portfolio, particularly
as the real estate segment continues to deteriorate. M&I
expects that charge-offs in the fourth quarter may be up to $195
million and the loan loss provision in the fourth quarter may be up
to $235 million. At November 30, 2007, M&I had a consolidated
tangible capital ratio of approximately 9.6 percent. "Despite these
challenging market conditions, we are fortunate to have one of the
strongest capital positions in the industry," said Mark Furlong,
president and CEO, Marshall & Ilsley Corporation. "We believe
we are well positioned to weather the downturn in the real estate
market." Marshall & Ilsley Corporation (NYSE:MI) is a
diversified financial services corporation headquartered in
Milwaukee, Wis. Founded in 1847, M&I Marshall & Ilsley Bank
is the largest Wisconsin-based bank, with 193 offices throughout
the state. In addition, M&I has 49 locations throughout
Arizona; 30 offices along Florida's west coast and in central
Florida; 14 offices in Kansas City and nearby communities; 22
offices in metropolitan Minneapolis/St. Paul, and one in Duluth,
Minn.; and one office in Las Vegas, Nev. M&I's Southwest Bank
subsidiary has 17 offices in the greater St. Louis area. M&I
also provides trust and investment management, equipment leasing,
mortgage banking, asset-based lending, financial planning,
investments, and insurance services from offices throughout the
country and on the Internet (http://www.mibank.com/ or
http://www.micorp.com/). M&I's customer-based approach,
internal growth, and strategic acquisitions have made M&I a
nationally recognized leader in the financial services industry.
This press release contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements
include, without limitation, statements regarding expected
financial and operating activities and results that are predicated
by words such as "expects," "anticipates" or "believes." Such
statements are subject to important factors that could cause
M&I's actual results to differ materially from those
anticipated by the forward-looking statements. These factors
include (i) M&I's exposure to the volatile commercial and
residential real estate markets, which could result in increased
charge-offs and increases in M&I's allowance for loan and lease
losses to compensate for potential losses in its real estate loan
portfolio, (ii) adverse changes in the financial performance and/or
condition of M&I's borrowers, which could impact repayment of
such borrowers' outstanding loans, and (iii) those referenced in
Item 1A. Risk Factors in M&I's annual report on Form 10-K for
the year ended December 31, 2006 and in M&I's quarterly report
on Form-Q for the quarter ended June 30, 2007, and as may be
described from time to time in M&I's subsequent SEC filings.
Except as required by federal securities law, M&I undertakes no
obligation to update these forward-looking statements or reflect
events or circumstances after the date hereof. DATASOURCE: Marshall
& Ilsley Corporation CONTACT: Greg Smith, Senior Vice President
and Chief Financial Officer, +1-414-765-7727, or Dave Urban, Vice
President, Investor Relations, +1-414-765-7853, both of Marshall
& Ilsley Corporation Web site: http://www.micorp.com/
http://www.mibank.com/
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